John McCain’s ‘economic plan’ packs a solid one-two punch for the middle class. His first hit is in his sweeping, unprecedented tax cuts–tax cuts that that go primarily to corporations and high-income tax payers, stripping the government of $300 billion in annual revenues.

Now John McCain has made it very clear that he plans to balance the federal budget by the end of his second term.

Criticism has been broad, coming from Paul Krugman, the Wall Street Journal, the American Prospect and Robert Bixby, director of the non-partisan Concord Coalition.

To balance the budget, McCain would need to cut federal programs down to a level they haven’t seen since 1976–decreasing spending by programs like the Department of Education, Department of Agriculture and Department of Labor over 40% if you hold constant defense spending, which the senator has agreed not to cut. No president would propose and no Congress would pass such draconian cuts.

So how will McCain balance the budget? James Pethokoukis of U.S. News thinks he has the answer: massive cuts in Social Security benefits. The cuts Pethokoukis outlines would not only eliminate the Social Security shortfall but also generate $2.9 trillion to help pay for McCain’s tax cuts. He points to McCain aides’ suggestions that he might raise the retirement age and cut the growth in benefits over time.

Implementing those two solutions would actually result in more money going into Social Security than is needed to fund scheduled benefits. There would be money left over to help reduce taxes or increase spending on education or energy or whatever [...] Now if you did a combination of price indexing starting in 2015 and extended the retirement age to 70 by 2050, that $5 trillion deficit turns into a $2.87 trillion surplus.

If Pethokoukis is right, McCain is attempting to do something that no president has ever done before: using payroll tax revenue to fund other functions of government. The result would be huge cuts in the program that lifts 13 million seniors out of poverty and a shift of the tax burden from progressive corporate taxes onto regressive wage taxes.

The gaping whole in McCain’s budget plans has left us all to speculate. But it cannot be a good sign for the McCain campaign when even McCain sympathizers think they detect a plan for massive cuts in arguably the most popular government program in history.

Yesterday, Alex Knapp at Outside the Beltway and Kevin Drum at Political Animal proposed getting a grip on tax proposals for the oil industry. As Drum put it: “[F]orget a windfall profits tax, let’s work first on getting rid of the massive corporate welfare infrastructure we’ve constructed for an industry that really, really doesn’t need it.”

Like Alex, Kevin couldn’t find the numbers behind Big Oil’s subsidies:

If I spent several months on this topic instead of half an hour, maybe I could figure this all out, but surely someone else has already done this?

Alex and Kevin, the Think Progress Wonk Room rides to your rescue.

In its report “Federal Financial Interventions and Subsidies in Energy Markets 2007,” the U.S. Energy Information Administration estimated that FY 2007 subsidies for the oil and natural gas industry totalled $2.1 billion. Center for American Progress Action Fund fellows Sam Davis and Daniel Weiss identify the worst of these tax loopholes and lost royalties that involve Big Oil:

The bipartisan Energy Advancement and Investment Act of 2007 had several provisions to close tax loopholes and recover royalties from big oil companies. These provisions would raise $25.9 billion over 10 years by:

• Modifying Section 199 to exclude gross receipts from the sale of oil and gas from the domestic production deduction. Raises $9.4 billion.
• Modifying Section 907 to eliminate the distinction between foreign oil and gas extraction income and foreign oil related income. This would combine foreign upstream and downstream income into a single oil basket for foreign oil and gas extraction income purposes. Raises $3.2 billion.
• Extending the oil spill liability trust fund tax through 2017, and increase it from 5 to 10 cents per barrel. Raises $2.7 billion.
• Recovering forgone royalties by establishment of an excise tax on removal price of taxable oil or gas from federal waters in the Gulf of Mexico. Raises $10.6 billion.

A significant bipartisan majority of the Senate voted for these provisions as an amendment to the Senate energy bill on June 21, 2007, but it fell two votes short of the super majority of 60 votes needed to end debate and pass the amendment.

Eliminating the entire “massive corporate welfare infrastructure” for Big Oil is a much weightier task, of course, entering into the realm of overall corporate tax policy. The Wonk Room has done extensive analysis of Sen John McCain’s (R-AZ) corporate tax proposals and how they would benefit Big Oil.

As economist Reuven S. Avi-Yonah writes in a Wonk Room report, Sen. McCain’s “economic stimulus plan” involves a $1.7 trillion increase in corporate welfare by cutting the corporate tax rate from 35 to 25 percent and by allowing first-year expensing of equipment purchases — a potent new form of tax sheltering.

Domestic Policy Advisor James Kvaal has written in the Wonk Room that the cut in the corporate tax rate alone would deliver about $3.8 billion in tax cuts a year to the five largest American oil companies:

Our guest bloggers are Robert Gordon and James Kvaal, fellows at the Center for American Progress Action Fund.

In his speech today on the federal judiciary, Sen. John McCain promised to nominate more Supreme Court justices like John Roberts and Samuel Alito. But as George Will has pointed out, Roberts and Alito “consider his signature achievement” – campaign finance reform – “constitutionally dubious.”

In the past, McCain has suggested in private that Alito was too conservative, at least according to John Fund and Robert Novak. But today he said:

I have my own standards of judicial ability, experience, philosophy, and temperament. And Chief Justice Roberts and Justice Samuel Alito meet those standards in every respect. They would serve as the model for my own nominees if that responsibility falls to me.

Last year, Roberts and Alito helped strike down a key portion of the McCain-Feingold law in a 5-4 decision, F.E.C. v. Wisconsin Right to Life, Inc. The right-to-life group ran ads calling on Wisconsin’s two senators, by name, to stop filibustering judges – ads prohibited by McCain-Feingold shortly before elections to prevent thinly veiled attack ads.

But the Supreme Court ruled that the ads were constitutionally protected as free speech. As Justice Stephen Breyer told the Wisconsin Right to Life lawyers, “If we agree with you in this case, goodbye McCain-Feingold.”

In another part of today’s speech, McCain criticized “judicial activism,” where judges “shut down debates by order of the court” rather than undertaking the “inconvenience” of the democratic process. But one of the “abuses by the courts” he cites is actually the opposite of judicial activism.

In Kelo v. City of New London, a city bought homeowners’ property through eminent domain and then resold it to a private developer. The Court’s majority declined to “second-guess” city’s determination that the plan was needed for its redevelopment and therefore was a valid public purpose. It was the conservative minority which wanted to overrule the city and impose its own policy preferences.